Staffing Company Sued Over Failed Background Check Disclosure

April 14, 2015

Staff Management Solutions (SMX), a TrueBlue company, has been sued in federal court, along with Amazon, their customer in the case. The lawsuit alleges they violated the Fair Credit Reporting Act because they did not disclose the information found in a background check that was used to deny employment to Gregory Williams of Irmo, S.C., who is the plaintiff.

SMX helps Amazon with seasonal hiring at its fulfillment centers, and Williams says he applied for a temporary job with Amazon at one of the online retailer’s distribution centers. The position would have paid $10.50 an hour and had the possibility of becoming permanent.

Background Check Process Begins

As part of the application process, Williams reportedly filled out a form giving SMX the authority “to obtain his consumer report for employment purposes.”

That form stated that if anything was found in the background check that could adversely impact his hiring, he would be given a copy, as well as an explanation of his rights under the Fair Credit Reporting Act.

It also stated the information can be disputed if the applicant finds it is inaccurate.

According to the lawsuit, Williams interviewed and then was offered the job almost immediately.

He came in again a couple of days later for a second in-person interview and orientation, and was told the job would start three days after that.

Concurrent to this, a credit check done on Williams by Sterling Infosystems Inc., found a misdemeanor violation for an open container, and a felony conviction for possession of cocaine.

Williams contends in the suit the misdemeanor violation was indeed legitimate, but the felony conviction was not.

It also claims SMX and Amazon denied him the job based on the background check results before disclosing the results of the report to Williams and allowing him the opportunity to speak to it and/or correct it.

A Phantom Felony?

Williams says he was told that Amazon could not hire him because his background check “contained a felony.”

However, according to the suit, “Williams informed SMX that the background check, which he had not yet received a copy of, must have contained inaccurate information because he did not have any such criminal record, and was recently cleared to obtain a permit to carry a concealed weapon, so there must have been a mistake.”

The lawsuit also goes on to say that "under the FCRA, any ‘person’ using a consumer report, such as Amazon and SMX, who intends to take an ‘adverse action’ on a job application ‘based in whole or in part’ on information obtained from the consumer report must provide notice of that fact to the consumer-applicant, and must include with the notice a copy of the consumer report and a notice of the consumer’s dispute rights under the FCRA, before taking the adverse action.”

However, “Williams was never sent by either SMX or Amazon a pre-adverse action notice, a copy of the background report used in the hiring process, or a statement of his rights under the FCRA,” according to the lawsuit.

The lawsuit was filed in federal court in Washington State. Williams is seeking to represent a class of other applicants who tried to obtain employment with Amazon through SMX and were denied employment because of information disclosed in a background check, but “failed to provide the applicant a copy of his or her consumer report or a copy of the FCRA summary of rights before it took such adverse action.”